GFL Sees Record Solid Waste Pricing in 2023, Provides Guidance for 2024

GFL (NYSE: GFL) (TSX: GFL) released its Q4 and full-year 2023 earnings, citing a record year in solid waste pricing for its continual growth.

Solid waste pricing for the full year reached 9.8 percent, the highest in the Vaughan, Canada-based provider’s history, with revenue hitting $7.5 billion in 2023.

"Our results for the year demonstrate that our commitment to our strategy is working,” Dovigi stated.

GFL finalized nearly $900 million in 39 acquisitions in 2023, which are expected to generate a combined $375 million in revenue on an annual basis. The company divested three non-core U.S. solid waste assets of $1.6 billion, deploying $275 million of those proceeds toward renewable natural gas (RNG) and extended producer responsibility (EPR)- related initiatives in Canada.

"Our EPR-related investments are expected to generate an aggregate of $80 to $100 million of incremental adjusted EBITDA starting in Q4 2024 and ramping up to the full run-rate by 2026," Dovigi commented.

"We continue to believe that these opportunities represent some of the best risk-adjusted returns that we have seen, and we will provide significant upside to our long-term recast trajectory in the coming years," he said.

"On RNG, our first contributions from our Arbor Hills facility are expected in Q1 2024, and we remain confident in our ability to achieve $175.0 million of annual Adjusted EBITDA from our RNG-related investments by 2026."

He added that GFL will focus on optimizing its current strategy for growth in the next year, expecting to allocate between $600 and $650 million into tuck-in mergers and acquisitions.

"The strong pricing momentum exiting 2023 positions us for 9 percent top-line growth in 2024 before considering the impact of incremental M&A and over 100 basis points of organic adjusted EBITDA margin expansion for 2024," Dovigi said.

Q4 Highlights:

Revenue: $1.88 billion
Adjusted EBITDA: $492.2 million
Net loss from continuing operations: $62.1 million
Adjusted Free Cash Flow: $471.6 million

Full Year 2023:

Revenue: $7.52 billion
Adjusted EBITDA: $2 billion
Net income from continuing operations: $32.2 million
Adjusted Free Cash Flow: $701.2 million

2024 Guidance:
Revenue: $8 billion
Adjusted EBITDA: $2.2 billion
Adjusted Free Cash Flow: $800 million